How Long Does It Take to Get Money From a HELOC?

A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by your home’s equity. It allows homeowners to borrow against their property’s value, providing access to funds as needed, up to a predetermined limit. Similar to a credit card, a HELOC offers flexibility: you can draw funds, repay them, and then draw again, as long as the account remains open and within its credit limit.

The HELOC Application Timeline

Obtaining a HELOC begins with an application process that spans several weeks. Initially, an inquiry or pre-qualification stage provides an early assessment of your eligibility, taking a single day to a few days. The formal application then requires submitting various personal and financial documents.

You will need to provide proof of income, such as recent pay stubs, W-2 forms, or tax returns if self-employed. Lenders also require homeownership documents, including property tax bills and mortgage statements. A credit check is an immediate part of the process.

The property appraisal, which determines your home’s current market value, is a component of the application timeline. This valuation helps lenders ascertain available equity. While some lenders may use automated valuation models for quicker estimates, a traditional in-person appraisal can take one to two weeks from scheduling to report delivery. Once documents are submitted and the appraisal is complete, your application enters initial underwriting.

Approval and Closing Stages

After initial information gathering, your HELOC application moves to underwriting completion. During this stage, an underwriter conducts a thorough review of all collected data, including your credit history, income verification, and the property appraisal. This assessment ensures you meet lender criteria and determines the final loan amount and terms, taking a few days to a week for a decision after all documentation is in place.

Upon approval, the lender prepares a loan offer along with disclosures outlining terms, interest rates, and fees. Reviewing these documents carefully before proceeding helps you understand your obligations. After accepting the offer, the next step is scheduling the closing appointment, where legal documents are signed.

At the closing, you will sign various legal instruments, such as the promissory note and a deed of trust or mortgage. A legal provision that impacts the timeline is the Right of Rescission. For HELOCs secured by your primary residence, a three-business-day cooling-off period is mandated after closing. During this period, you have the right to cancel the agreement without penalty. Funds cannot be disbursed until this rescission period has expired.

Receiving Your HELOC Funds

HELOC funds become available after the three-business-day Right of Rescission period concludes. If the HELOC is secured by your primary residence, funds are released on the fourth business day following the closing date. For HELOCs on secondary homes or investment properties, this rescission period does not apply, and funds might be available as early as the next business day after closing.

Borrowers have several methods to draw funds from their HELOC. Methods include using a special checkbook, a linked debit card, or initiating online transfers to a checking or savings account. Some lenders also allow in-person draws at a branch. The time it takes for funds to appear in your account can vary, from immediate access if using a checkbook or card, to one to two business days for electronic transfers.

A HELOC is a revolving line of credit, not a lump sum loan. This means you can draw funds as needed, up to your approved credit limit, throughout the draw period. You only make payments on the amount you have actually borrowed.